Federal Court Dismisses Most Claims in Class Action Lawsuit Related to GPB Investments
From the Desk of Jim Eccleston at Eccleston Law LLC:
A class action lawsuit related to GPB investments has been largely dismissed by a federal court in New York. The investments at issue in the lawsuit were fractional interests in GPB Automotive Portfolio, LP, and GPB holdings II, two private equity funds that invested in auto dealerships. Both GPB investments have been under scrutiny by regulators since 2018 and have been the subject of numerous lawsuits since that time. According to the Plaintiffs in this lawsuit, the GPB investments were actually a Ponzi scheme.
The lawsuit named a number of defendants, including the two aforementioned limited partnerships, their general partner GPB Capital holdings LLC, and co-founders David Gentile, Jeffrey Lash and Jeffry Schneider (the “GPB Defendants”). Additionally, the lawsuit named entities and firms that sold and marketed the GPB Investments.
In an Order dated December 13, 2020, the federal court dismissed all claims except those made against GPB Capital for breach of contract and the claims against the GPB Defendants for fraudulent misrepresentation. In dismissing the other claims, the federal court found that the complaint had failed to make non-conclusory allegations, and did not adhere to the heightened pleading requirements necessary for a fraud case. The plaintiffs had alleged a number of claims, including fraud, aiding and abetting fraud, breach of contract and unjust enrichment.
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